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Highlights of Republicans' 2014-15 Pennsylvania budget plan

The Associated Press

Updated:
07/02/2014 11:32:19 PM EDT

Highlights of the Republican-crafted spending plan for the 2014-15 fiscal year that started Tuesday. The main appropriations bill is on Gov. Tom Corbett's desk after passing the Senate and the House on Monday. Some major revenue and spending items remained unclear because companion budget legislation had not passed yet. Comparisons are to the budget approved for the 2013-14 fiscal year:

THE BIG PICTURE

— Increases spending by $723 million, or 2.5 percent, to $29.1 billion over the current year's approved budget. Counting an additional $220 million that it would add to the books of the 2013-14 fiscal year that ended Monday, the entire package is a $943 million increase, or about 3.3 percent.

— Generates $29.6 billion through taxes, fees and other revenue sources, an increase of $1 billion, or 3.5 percent.

TAXES/REVENUES

— Contains no new taxes.

— Continues the phase out of the capital stock and franchise tax to 0.45 mills on Jan. 1 from 0.67 mills currently.

— Continues an increase in the cap of the net operating loss deduction on Jan. 1 to $5 million or 30 percent of income, whichever is greater.

— Reduces the period in which unclaimed property must be held by institutions and businesses from five years to three, generating $150 million in one-time revenue.

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— Calls for the extraction of natural gas from beneath state-owned parks and forests through drilling on private, adjacent lands that does not require any surface impact on public lands, generating $95 million in immediate revenue and additional future royalties.

— Transfers more than $700 million from off-budget lottery sales, legal settlement money paid by tobacco companies and revenue from oil and gas drilling leases on state lands.

— Relies on $625 million in excess funds left over unused from prior appropriations.

— Postpones the payment of $392 million to providers of medical care and mental health services under Medicaid.

— Transfers $100 million from the Machinery and Equipment Loan Fund and $100 million from the Small Business First Fund.

— Transfers $125 million from fees paid by the state's licensed casino owners.

— Transfers $30 million from the Volunteer Companies Loan Fund.

EDUCATION

— Does not increase $5.5 billion in basic education funding to public schools for instructional and operational costs.

— Adds $11 million, or less than 1 percent, to the $1.6 billion state aid for higher education.

— Provides $100 million for new "Ready to Learn" block grant program that will provide a menu of options guiding school districts on how they can use the money.

— Increases special education funding by $20 million to $1.05 billion.

— Increases funding for school construction by $10 million to $306 million.

— Sets aside $1.67 billion, an increase of about $555 million, to pay the state's share of pension obligations for state and school employees.

— Transfers $225 million in private equity investments and cash reserves from the Tobacco Settlement Fund and Health Venture Investment account to the school employees' pension fund to help reduce the state's pension obligations.

HEALTH CARE/SOCIAL SERVICES

— Increases funding for the Department of Public Welfare operations, county assistance offices and information systems by $69 million to $499 million.

— Projects $125 million in first-year savings from proposed changes to the state's Medicaid program that still require federal approval.

— Increases funding for mental health services by $41 million to $732 million.

— Increases funding for county child welfare services by $28 million to $1.08 billion.

— Increases funding for services for Medicaid-eligible people with intellectual disabilities by $40 million to nearly $1.07 billion.

LAW AND ORDER

— Increases funding for Pennsylvania State Police operations and cadet classes by nearly $15 million to $205 million.

— Increases funding for the Department of Corrections by $97 million to $2.06 billion.